How small companies can partner with large companies to accelerate their business growth

August 2013

I have been struggling to see the clear
and strongly compelling value for social technologies in a B2B environment for
the last two years. Though having spent
time looking at - and personally working with - social technologies including
Twitter, Facebook and LinkedIn, I haven’t found it very compelling for B2B (sure
LinkedIn is not bad for marketing yourself).
They are very compelling social technologies worth lots of money to
folks marketing to consumers – B2C. But for
B2B, it’s been unfulfilling. Am I too
old or just a Luddite?

I am a firm believer that new technology has to be a LOT better than
the old way to get people to change behavior.
The consumer social technologies are clearly delivering that – a LOT
better way for us to keep up with friends, reconnect with old friends we lost
touch of, helping families with members spread across the country and globe,
making new new friends, arranging social events and much much more. The “old
way” of telephone, and linear email and text just wasn’t getting the job done.

Now I have seen the light

It’s the B2B focused social “SHARING” technologies that include web
services like Chatter, Yammer – and more recently at my company, Autodesk 360
Pro. Increasingly these B2B sharing
sites are becoming Facebook for us business types. Why settle for sending an email to my team
(38 people located around the world) that would lead to several “side threads”
with various team members – when I can just post it for everyone to see,
comment, like/dislike, and post related information? Why limit my team from sharing through limited
linear email and text – or struggle with the ugliness of a conference call meeting
with team members in 10 different time zones?
Why limit the ability to for my team members to deliver content on a
subject in whatever format they so choose - photos, spreadsheets, Word and
GoogleDocs, links, videos and more – that can be shared from their device of
convenience? Why just share information
with a limited number of my staff because of my limited bandwidth to field
email responses – when questions can be shared and answered by the team? Why not use the new social technologies to
quickly create teams “on the fly”, get the job done and then disband the team a
few months later? Why not quickly build
teams that span organizations and talent outside Autodesk tying them together in
a flexible real time “stream” of communication, sharing and innovating? Why not let team members and partners share
information in the way best for them – whether sitting at their desktop, using
a phone or tablet, through a browser on a friend’s device – wherever and
whenever? Why do I struggle getting my
team to go beyond my personal limitations – when I can empower all of them to
run in front of me?

I finely get it. It’s been near
two months now since I made the leap to flexible powerful B2B social, and as I
was looking for from the beginning, the clear
and strongly compelling value is there.

Its NOT about marketing.

Its about efficient and powerful sharing, collaboration and teamwork.

And I am never going back.

As my kids told me a few years back, “email is lame”. Yes it is.
Just took me a few years to really and deeply get it for the B2B
environment I live in.

So…

If you dance with an elephant, what is their social strategy and
technology – and how are you planning to leverage it? Because if you don’t have a social answer your
current and future customers are going to leave you for someone who does. If your favorite elephant doesn’t have a
clear strategy for how they are going to help their and your joint customers
collaborate freely and easily, it’s time to find another elephant.

Thought I would give you a brief summary of recommendations for getting
your business growing again after sales have plateaued and you aren’t sure how
to kick start another high growth phase.
I work with a number of partners that, with the first year or two of
starting their business, they quickly grew to near $1 million dollars per
year and 10 or so people – and then stopped growing. I also frequently see partners reach a
plateau when they reach 50-60 people and sales of $6-8 million.

Not IMO coincidentally, these “growth stalls” are when a business needs
to add another layer of management. At
10-12 people, further growth requires the founder to hire managers and cede
responsibility for many day to day activities.
At 50-60 people the founder now needs to start developing a second level
of management and ceding some long term business development decisions to them.

Much of the following, which I have seen in action while working with
partners, comes from an interview of
Frank V. Cespedes, a senior lecturer in the Entrepreneurial Management unit
at Harvard Business School.

Failing to become the market
leader

Failing to become a leader in your market – a leader in a niche
industry on a global basis or a leader in a specific geographic region within a
large industry, is a common reason for a growth stall. You have had good success selling your
product or service “locally” but have struggled to expand your geographic reach
and/or expand sales of “new” products or services to existing customers. First – why does it matter whether you become
a market leader in your industry? It’s
pretty simple. Market leaders have lower
cost of sales and marketing then non-market leaders. This is driven by customer behavior – market
leaders have been vetted by the industry so I don’t need to invest as much time
and effort qualifying a supplier the market has already agreed delivers good
value and is reliable. The lower cost of
sales and marketing creates higher profits and increased ability to invest in
expanding sales, invest in expanding your product line, and the ability to “as
needed” discount your product and services to win key accounts.

Ineffective triage

This is very much related to failing to become a market leader – in
that one tries to do too much, tries to be too many things to too many
people. If you are pursuing too many
different types of customers, becoming a market leader in one industry segment
is hard to do – never mind trying to become a leader in several industry
segments at the same time.

Likewise, trying to grow software sales (whether an app or a web
service) while also aggressively pursuing growing a services business is
fraught with pitfalls. The way you
manage a software company is way different then the way you manage a consulting
services business – management structure, KPIs, financial structure, people
management and more. This is the most
common trap I see – companies that started with a software strategy, found
growth and profitability slow to develop – so grew their consulting services
business. The trouble is their vision
and business structure stayed one of a software company which creates a number
of conflicts with the consulting services ide of the business that is paying
the bills. Consulting services companies
love complexity and high touch – while software companies are trying to
eliminate complexity and high touch through infinitely scalable code. Consulting services companies are selling
bodies and hours – where headcount grows linearly with business growth – very different
then a software business with a more fixed headcount that grows much slower than
sales. Are you a services business or a
software business (again web services is in the software bucket)?

Another triage trap is geographic.
Are you focused on developing your business regionally, in one or a few
countries or in several countries? As
with focusing on a narrow set of customer or choosing to grow a software or
consulting business, you cannot grow your business in more than a few companies
at one time. And yes this means turning
some business that “walks in the door” away – because of the long term support
costs it will inevitably lead to. If you
have a strong business in your home country or region (say Central Europe),
sure you can pursue growing the business in 1, 2 or 3 additional countries –
but more than that is asking for trouble as “hidden” costs and inefficiencies
sneak into your company trying to support customers in faraway lands. If you are pursuing breaking into a “big
market”, such as the US, Japan, Germany or China, where there is lots of local
competition, you’ll need to be more focused yet. Think you can tackle developing your business
in a few new countries and one or two of these “competitive shark tanks”? Think again.